US Congress Sells Out to Wall Street

Linked on our blogs with the french version of this article. – Published on Voltairenet.org, by Greg Gordon*, Lindsay Renick Mayer, January 17, 2011. (This article is also available in spanish and italian).

In the United States’ footsteps, many countries also adopted costly recovery plans during and after the 2008 financial crisis. As Greg Gordon and Lindsay Renick Mayer point out, the blueprint for such plans was imposed on Congress by the very banks which benefited from them most, with the support of lawmakers who were handsomely remunerated and some of whom are quite well known … such as Barack Obama … //

… Update by Lindsay Renick Mayer: 

Even as the federal government has continued to figure out ways to help the struggling finance sector and give the economy a boost, they’ve been collecting input from the very companies that have accepted taxpayer dollars and are, in part, being held responsible for the current crisis. But that’s not all they’ve collected—Congress has been busy fundraising from the finance sector, including those companies that received billions of dollars from TARP.

Since this story was written in February, the finance sector has, of course, continued to give money to candidates, party committees and political action committees. Since the start of 2009, Wall Street has donated $12.6 million—more than any other sector this year. And 58 percent of that has gone to Democrats, marking a change, perhaps, in political strategy. Not since the 1990 election cycle have finance, insurance and real estate companies given more than 52 percent of its overall donations to Democrats, and from 1991 to 2006 finance gave the majority of its money to Republicans.

  • Many of the companies that we wrote about in this story that sent their CEOs to testify before the House Financial Services Committee have actually scaled back their overall giving in the first quarter of 2009 compared to the first quarters of 2007 and 2005.
  • This includes JPMorgan Chase, Bank of America, Goldman Sachs (which ranks No. 1 for a decline in contributions this year compared to the start of 2008), Morgan Stanley, Citigroup and Wells Fargo.
  • However, it is still very early in the cycle, and campaign contributions generally don’t start flowing in until closer to an election.
  • For the most part these companies, like the rest of the industry, targeted Democrats with a majority of their political giving.

Of course, a big story this year will be whether lawmakers took a hit to their personal finances like much of the rest of the country, or whether they personally benefited by infusing the Wall Street companies with taxpayer cash, especially members of the banking and finance committees. The 2008 personal financial disclosure reports with those answers are now available on OpenSecrets.org.

To read more about how lobbying and influence peddling are shaping legislation:

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